November 2, 2009, 12:00 AM

Forrester predicts online retail sales will grow 8% this holiday season

94% of consumers who have recently bought online plan to shop the web for holiday gifts, Forrester Research finds. The 8% growth to $44.7 billion would be an improvement over last year’s 5% increase in holiday e-retail sales, according to Forrester.

Online holiday retail sales will grow 8% this year to $44.7 billion, predicts Forrester Research Inc. That would represent a continued shift of shopping to the web, as the National Retail Federation has forecast total retail sales will decline 1% this holiday season.

"Despite the lingering effects of the recession, the online space remains the retail industry`s growth engine," says Forrester e-commerce analyst Sucharita Mulpuru. "What`s different this holiday from past years is that online retailers will manage to the bottom line, which will change some of the tactics they have employed in the past." Those changes will include more selective use of discounting and free shipping offers, Mulpuru says in the report “US Online Holiday Retail Forecast, 2009.”

The 8% growth projection is based on data from both consumer and retailer surveys Forrester has conducted in the past few months. The research firm found 94% of consumers who have purchased online in the past three months plan to shop at web sites this holiday season, up from 92% last year. (Forrester defines the holiday season as November and December.) In addition, 72% of retailers Forrester surveyed in the third quarter for “The State of Retailing Online 2009” published by e-commerce trade group Shop.org say they expect their online sales will be higher this year than last.

Better than last year is not particularly high praise, Mulpuru notes. “Given last year’s slumping sales, retailers are up against less aggressive comps this year, which accounts for a positive 2009 holiday outlook,” she writes. Forrester estimates online retail sales last November and December totaled $41.4 billion.

Despite the relatively easy comparison with a weak 2008 season, some other observers are less optimistic than Forrester. Gian Fulgoni, chairman of web measurement firm comScore Inc., says projections based on retailer surveys can be overly buoyant, as better-performing merchants are more likely to respond. Fulgoni projects online holiday sales will increase by 0-5% this year, and notes comScore will issue a more detailed forecast after analyzing early November sales data.

Here are some other highlights from the Forrester holiday report:

  • 61% of online consumers say they shop online because they find products there they can’t find elsewhere, 52% because it’s easier to compare prices, 52% to avoid crowds at stores, 46% because they can usually find the best deals online and 45% because it helps them find new gift ideas.
  • 42% of consumers surveyed say free shipping offers will motivate them to buy more online than in the past, 39% plan to wait for an item is on sales before they purchase, 33% plan to do more online research to get the best price, 32% plan to search more for online coupons and 20% say they are more likely to open e-mails that offer discounts.
  • Smaller retailers could face more difficulty this year: 39% of merchants that reported year-over-year online sales decreases in the third quarter were smaller, versus 17% of medium-sized retailers and 21% of larger ones.
  • The number of online buyers planning to spend more on apparel and accessories increased four percentage points over last year, while those planning to spend more on books and on computer hardware or software decreased by eight and five percentage points, respectively.
  • Forrester predicts retailers will keep inventories leaner this year, and offer more limited-time or limited-quantity sales instead of across-the-board discounts. Shoppers may have to buy more to get free shipping.

comments powered by Disqus

Advertisement

Advertisement

Advertisement

From IR Blogs

FPO

Jim Erickson / E-Commerce

Why Western brands should register trademarks in China—now

China doesn’t recognize trademarks registered in other countries. Companies that register first in China get ...

FPO

Asher Elran / E-Commerce

E-commerce and duplicate content: solutions to common problems

Google penalizes retail web sites that display the same content on multiple pages, or that ...

Advertisement